Oneida obtains waivers on covenants and payments; gets postponement of loan reduction

By Sara Rosenberg

New York, Nov. 3 - Oneida Ltd. said it has obtained waivers through Nov. 21 from its lenders regarding financial covenants and debt payments in a move that will let the company provide lenders with updated financial information and restructuring plans.

Bank lenders have agreed to postpone a scheduled $5 million reduction in the line of credit until Nov. 21, the company said. In addition, the company's senior note holders have agreed to defer until Nov. 21 a $3.9 million payment that was due on Oct. 31.

Under an April 2003 amendment to its credit agreement, which among other things extended the term of the credit facility, the commitment under the revolving loan was reduced to $225 million with further reductions to $220 million at July 25, $215 million at Nov. 3, $205 million at Jan. 30, 2004, $185 million at Feb. 7, 2004, $175 million at May 3, 2004, and $165 million at Nov. 1, 2004, according to a filing with the Securities and Exchange Commission.

As of July 26, the company was in violation of the interest coverage ratio, leverage ratio and net worth covenants and received waivers from its lenders. Since there were more restrictive covenants to be met as of Oct. 25, the company said it anticipated not being able to comply with these requirements and intended in the third quarter to request amendments to the revolver as well as the note agreements.

"The company continues to work with its lenders to make appropriate modifications to its credit facilities and expects there will be a further deferral of the above reduction and principal payment until such modifications have been agreed upon," a company news release said.

Oneida is an Oneida, N.Y., manufacturer and marketer of tableware products.

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